Multiple offers - De facto standard for turning down offer due to low pay

Question

I have been fortunate enough to receive offers from four different companies after taking a week of vacation days to interview with about 12 companies in total. What a scheduling task indeed.

Two of the companies I have already disqualified due to very low pay. By that, I mean it would be a 30% cut. One company (let's call it Company A) is offering a package which equates to about a 8% cut from my current salary, but with potential to move into a bigger role in the future. I think I'd enjoy working there too (compared to my current job) but I didn't expect to be hit with a pay cut of all things. A second offer from another company (Company B) is looking good, offering a comparable pay (to my current job), benefits, and vacation, but most importantly, a much better work/life balance.

My intent is to go with Company B, as the benefits package is too good to turn down, it can help me take care of outstanding bills, and spend more time with my family.

Company A has already maintained that there is no room for negotiation when I brought it up. I personally don't think trying to force their hand with a counter-offer in hand would work well for me, as I don't want them to pull the offer, since I'd be almost willing to take such a cut due to dissatisfaction with my current employer. They've also asserted that they can't change their offer, as HR has "tied their hands".

So, to the question: when I call Company A in a few days to decline their offer, should I just provide the canned useless polite answer (ie: "Thank you, but I found an opportunity I can't pass, it is more in line with my long term goals", etc), or should I be honest and tell them that both companies have a lot of potential, but it was a question of numbers, and one company is offering me a pay raise rather than a pay cut.

My own advice to myself is to leave ego and emotions out of the equation, and if I feel a bit smug when debating what to say, I should seek outside advice. What are your thoughts? Give the usual canned answer so I don't offend them at all, or be polite and honest?

Answer 1

The common response I hear is similar to yours ("be vague; don't give them something to write down later in case you apply with them in the future"), but I see a benefit (to the company) to telling them "I'm sorry, but your offer is below market rate for my services, so I'm unable to accept it". If the company gets enough similar responses, it could give them the bargaining power to go to the higher-ups and say "we're getting a lot of push-back on this offer, saying it's too low. We need to reconsider improving it, or at least opening negotiations if it's the right person".

(The fact that it's a pay cut opens that door to a slightly different answer as well - "I'm sorry, but your offer would be a pay cut for me, and I'm not in a position to accept that." The effect is the same ("we need to offer more money to attract the right candidate"), but it's even more understandable - "this person's not even necessarily looking for a pay increase, just to not have a pay decrease".)

However, as you say, there's the risk of upsetting them if they're not happy to hear what you have to say.

In the end, the answer is up to you - if you don't feel like risking it, there's nothing wrong with giving them the polite answer. (Considering you've discussed the benefits and salary enough that they told you "HR tied our hands", they'll probably at least infer that that's part of the reason, even if you don't mention it.)

Answer 2

I don't know who started this, but asking for more money is not taboo. Salaries early on in your career grow exponentially. Don't cheat yourself. Negotiating and asking for more salary are just part of being in the workplace. Get use to it and don't be ashamed. It's not like these people are going to work somewhere else 5 years from now and if you apply for a job say, "Isn't this the guy that wanted 8% more?" You and most of the other job applicants.

You can indicate that they went as high as they could, but if they offered more, you'd take the job. You could also ask them to consider renegotiating after 3 months. Ask for more vacation time. There has to be something you want. If this place is really worth working for, they want this information to improve their hiring practices. You'd be doing them a favor.

Answer 3

I once received two offers (nearly) simultaneously (this was early in my career and they were for fairly junior-level positions). One was 30% higher than the other. I was unemployed at the time, so either would have been a 'raise' from that perspective (though, the lower offer was less than my previous salary). I sent a polite email rejecting the offer from Lowball Corp, saying the canned "Sorry, but I decided to pursue another opportunity that is more in line with my career aspirations, etc."

A couple of hours later I got a call from Lowball Corp's recruiter, asking for the "real reason" I rejected the offer. I said "Look man, MegaCorp offered 30% more than you did." He was understanding and I got the impression he was going to talk to the hiring manager about increasing the budget for the position.

I guess my point is, just as you would like to have (useful, actionable) feedback when a company declines to extend an offer, sometimes the reverse is true. And the risk of lawsuits when giving honest feedback to a large company is pretty close to nil.

Answer 4

I'd go for the second route. I wouldn't see it as forcing their hand either, because if they come up with a counter offer, it means there was actually room for negotiation. First rule in any negotiation is "bargaining position" - when you were interviewed they had the advantage - and so they wanted to get your for the lowest amount, which is a fair stance - now you can balance the scales with the counteroffer in hand. Make sure you DO NOT reveal from what company the second offer is, if pressed.

I'd call them, but wait before accepting the offer from company B. Company A might come with a new proposal.

Answer 5

I came across this recently also.

Rather than being vague, I prefer honesty on both sides - sure you mightn't get an unexpected amount, but hopefully the company will take your expectations seriously.

If you still think you'd prefer to work there:

You mentioned they have already said they cannot negotiate. If you won't accept their current offer, there's no problem if they still refuse if you talk about it again.

What I have done and recommend you say is something along the lines of 'Look, I have another offer at this time which is really attractive in terms of compensation. I do think that I would enjoy working at your company more, so while I don't expect as much compensation - I would need {figure} to accept your offer, considering my options.

If they still decline then say "sorry, I'll have to reject the offer then". The company should be understanding enough if you are outside their pay ranges.

You're rejecting regardless (Perhaps you have already accepted A)

Keep it simple and say you recieved a much better offer elsewhere. You've made your mind up and there's no point going into too much more detail.

Answer 6

Let's say you are making $100,000 a year right now and A offered you $92,000 which is about your situation (8 percent pay cut). And you'd like to work for A, but not for $92,000. Actually you want a bit more than $100,000. And you won't start for less than $100,000.

There are two possibilities: They can be made to pay you more, or they can't. You assume that they can be made to pay you more - if that assumption is wrong, then whatever you do won't help or hurt. I would tell them something like this: "I would really like to work for A, but the offer is even below my current salary, and I won't move jobs for a lower salary. On the other hand, I also think that what I would offer to the company is worth more than $92,000. So unfortunately I cannot accept your offer, but I would be very happy to consider an offer with a different salary".

So tell them with confidence that the offer is below what you would accept, and below what you are worth. Without giving them an exact figure. It's up to them. If they think the job isn't worth more than $92,000, too bad. If they think it's worth more than $100,000 but they tried to hire you cheaply, you might get a good or at least a decent offer. If they offer $99,000 and you don't accept, at least it will help the next guy who applies for the job.

Answer 7

Give the usual canned answer so I don't offend them at all

Yes I believe this would be the best approach. It's possible that several years down the road you might want to apply to that company again. Telling them that you accepted an offer for more $$ shows your hand and now they know $$ is more important to you. You as an individual don't benefit by providing additional information to Company A.